To gain transparency and efficiency in today's increasingly complex regulatory environment, Bloomberg Professional service subscribers can now access a derivatives margin calculator developed by LCH.Clearnet, Bloomberg announced today.
Bloomberg is the first financial information platform to integrate LCH.Clearnet's SwapClear Margin Approximation Risk Tool (SMART) to help market participants efficiently approximate the capital funding requirements needed for swaps clearing and comply with the latest Dodd-Frank mandates.
"Investors can now easily calculate the capital they need to clear their swap portfolios on the same platform they use for analytics, trade execution and access to clearing," said Ben Macdonald, Bloomberg's Global Head of Product. "This collaboration with LCH.Clearnet is another example of our commitment to providing clients the tools they need to navigate a growingly complex regulatory environment."
LCH.Clearnet's margin calculator is integrated with Bloomberg's multi-asset class analytics and trading platforms, making it easy to anticipate, and therefore manage, how large price movements and changing market conditions will impact capital needs. Bloomberg Professional service subscribers can access the tool to simulate their portfolios' exposure to risk factors and perform instantaneous, consistent margin approximations, prior to clearing, for no additional cost.
"As a result of mandatory clearing requirements, the need for on-demand margin analysis is critical and accessing a clearinghouse's margin calculations on the Bloomberg Professional service helps me to manage my investment decisions and operations," said Matthew Lynes, Portfolio Manager at Aberdeen Asset Management. "Bloomberg continues to provide the solutions the industry needs to meet regulatory requirements and make better informed investment decisions on behalf of our investors."
"The integration of SMART into the Bloomberg Professional service allows market participants to easily run SwapClear's market leading risk analytics on their portfolios and approximate their margin requirements ahead of submitting their trades for clearing," said Daniel Maguire, Head of SwapClear U.S. at LCH.Clearnet. "This collaboration helps participants understand their risk, optimize their portfolios for greater margin efficiencies and meet regulatory requirements at a time of significant change in the global marketplace."
The Dodd-Frank Wall Street Reform and Consumer Protection Act requires that interest rate swaps and other derivative products are traded on a swap execution facility (SEF) and centrally cleared. To support clients in complying with this regulation Bloomberg registered and received approval from the Commodity Futures Trading Commission (CFTC) to operate a multi-asset class SEF starting October 2nd. More than 200 global institutions are already using Bloomberg's clearing channels to clear derivatives trades with the major clearinghouses, including LCH.Clearnet.